NRG Yield agreed with Terra-Gen Power LLC to acquire the Alta Wind facility located in Tehachapi, Calif., for $870 million, plus the assumption of $1.6 billion of non-recourse project financings and subject to customary working capital adjustments. The acquisition, which totals 947 MW of operating wind power capacity, also includes a portfolio of land leases associated with the Alta Wind facility.
NRG Yield intends to fund the purchase price through a combination of newly issued debt, common equity and cash on hand. The transaction is expected to increase both the annual run-rate EBITDA by about $220 million and cash available for distribution by about $70 million (before debt service associated with acquisition financing) by 2016.
Alta Wind Highlights:
· Contracted long-term power purchase agreements with Southern California Edison with 21 years of remaining contract life for phases I-V and 22 years, beginning in 2016, for phases X and XI
· Located in a premier wind resource area with over 30 years of wind operating history and close proximity to the Los Angeles load center
· Utilizes 386 GE and Vestas turbines with commercial operations achieved within the past four years
· Immediately accretive to Cash Available for Distribution per share
· Grows the combined wind portfolio owned by NRG Yield and its parent, NRG Energy, to 2,839 MW, making it the fifth-largest overall operating portfolio in the North American wind industry
Bank of America Merrill Lynch acted as exclusive financial advisor to NRG Yield in relation to this transaction and rendered a fairness opinion to the board of directors of NRG Yield. Jones Day served as legal counsel to NRG Yield.
NRG Yield expects to close the transaction in the third quarter of 2014. The transaction is subject to customary closing conditions, including the receipt of regulatory approval by the Federal Energy Regulatory Commission (FERC), the U.S. Department of Justice and the Federal Trade Commission under the Hart-Scott-Rodino Act, as well as notice of the acquisition to the California Public Utilities Commission.